Connecticut Foreclosure Law
Connecticut State Foreclosure Law dictates that lenders may only avail of the Judicial Foreclosure process to foreclose mortgages in default, unlike in other states where Non-Judicial or “Power of Sale” Foreclosure process is also available. All disputes regarding foreclosure must be done through the courts. The typical time of process last about 60 days and the mortgage is the primary security instrument recognized. In the State of Connecticut, Deficiency Judgments are allowed but the Right of Redemption is very limited.
The Connecticut Judicial Foreclosure process is classified into 2 distinct judgments – the “Strict Foreclosure” or a “Decree of Sale.” In any of the two judgments, the lender is required to file a lawsuit seeking an order to foreclose before any actual foreclosure process may begin. With the strict foreclosure procedure, once the borrower is proven to be in default of the mortgage, a court order is issued, decreeing that the title be transferred to the lender immediately without any need for an actual foreclosure sale. The borrower, however, may still redeem the property within a specified length of time to be determined by the court. Should they fail to settle their obligations on or before the deadline given by the court, the title becomes absolute to the lender and the borrower forfeits all further claims to the property. The lender is then given 30 days to record a certificate of foreclosure, which must contain a legal description of the property, detail of the foreclosure proceedings, the mortgage, and the date that the title had become absolute.
With a decree of sale, instead of an outright transfer of the title, the property in dispute will be put up for a foreclosure sale and the court will be decreeing a process to which the foreclosure sale will be administered. The foreclosure sale is usually done through a public auction wherein the property being foreclosed is awarded to the person making the highest bid for cash. The court will be responsible for setting the date, time, and all other matters pertaining to the foreclosure sale. Along with the scheduling of the foreclosure sale, the court will also appoint a committee to handle and administer the property and the proceedings. The court will likewise appoint 3 appraisers to determine the value of the foreclosed property. During the period between the court order and the date of sale, the borrower is given the opportunity to stop the foreclosure proceedings by paying the outstanding balance due on the mortgage. However, should the borrower fail to settle all obligations by the end of the day prior to the date of sale, the committee will proceed with the foreclosure sale and the borrower forfeits all further claims to the property.
In Connecticut, the lender may avail of the opportunity to sue for a deficiency judgment. This is done in cases where the property is sold for an amount substantially lesser than the total amount owed by the borrower. The borrower will then be further required to settle any deficiencies that the foreclosure sale failed to address.
|
